DESCRIPTION (APPLICANT'S ABSTRACT): Recently a group of novel antipsychotic medications has become or are expected shortly to become available for the treatment of schizophrenia (risperidone, olanzapine, sertindole, quetiapine). Although their efficacy compared to placebo are established, the degree of benefit of these agents to patients in actual clinical practice relative to the older medications remains uncertain. In efficacy trials which have employed an active comparator in addition to or instead of placebo, the relative outcomes of these agents have been compared almost exclusively to a single agent, haloperidol. These data leave unanswered the question of pivotal importance to patients, families, and clinicians: how will the average patient benefit on one of the newer agents compared to the best choice among typical drugs based on each patient's individual previous treatment history and current clinical status? The relative cost of treatment associated with these agents also remains uncertain. It is often argued that the newer drugs will reduce hospitalization and other service utilization and that the reduced costs of service will offset the greater medication expense. The extent to which these cost savings are actually realized in practice, however, has not yet been demonstrated. This is a question of interest not only to patients, families, and clinicians but also to health care administrators, taxpayers, and formulary committees. The present proposal has two specific aims: to determine (1) the relative clinical outcome consequences and (2) the relative cost of treatment consequences of a decision to prescribe one of newer atypical antipsychotic medications vs traditional typical antipsychotic medications. These questions will be addressed using an effectiveness trial, a prospective clinical trial utilizing random assignment to open label alternatives. Patients randomized to atypical (n=200) or typical (n=200) medication classes will choose specific medications from within their assigned class. Benefit and cost outcomes will be assessed comprehensively over a one year follow-up. Eligible patients will be selected from among the group of patients acutely hospitalized for schizophrenic relapse in a state mental health care system.